:
I call this meeting to order.
Welcome to meeting number 79 of the House of Commons Standing Committee on Health.
Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. I believe all of our witnesses are here in person. There are just a couple of MPs who are remote, so I can dispense with all the notes with respect to hybrid participation. In accordance with our routine motion, I am informing the committee that all remote participants have completed the required connection tests in advance of the meeting.
Pursuant to Standing Order 108(2) and the motion adopted on September 18, 2023, the committee is holding a briefing session on natural health product regulations.
I am pleased to welcome our witnesses from the Department of Health: Linsey Hollett, assistant deputy minister, regulatory operations and enforcement branch; Dr. Celia Lourenco, associate assistant deputy minister, health products and food branch; and Dr. Supriya Sharma, chief medical adviser and senior medical adviser, health products and food branch.
Thank you for taking the time to appear today. I know that some of you have made some significant personal and professional sacrifices to be here.
You have up to five minutes to provide your opening statement. I understand that Dr. Lourenco is going to do that.
Welcome. You have the floor.
[Translation]
Good evening, everyone.
[English]
I would like to thank the committee for the opportunity to appear before you today.
My name is Celia Lourenco. I am the associate assistant deputy minister of the health products and food branch at Health Canada. I'm joined by Dr. Supriya Sharma, chief medical adviser at Health Canada, and Linsey Hollett, assistant deputy minister of the regulatory operations and enforcement branch.
Natural health products, or NHPs, such as vitamins, minerals and herbal remedies, are used daily by Canadians to maintain and improve their health. These products are regulated under the natural health products regulations, which were established nearly two decades ago in response to a study undertaken by this very committee. The regulations take into account the lower risk profile of these products and their ability to make health benefit claims.
Since that time, Health Canada has estimated there are over 200,000 products available to Canadians on the market. Our highest priority is to ensure that Canadians have access to safe, high-quality products to help care for themselves and their families.
[Translation]
While progress has been made over the past 20 years, the 2021 audit by the Commissioner of the Environment and Sustainable Development found significant gaps in oversight, underscoring the need for more action. This includes the need for increased oversight of the quality of natural health products, improved product labelling, greater monitoring of labels and advertising, and introducing a proactive risk-based inspection program.
Following the audit, Health Canada made firm commitments to strengthen its oversight of natural health products, as we discussed last year with several of your colleagues at the Standing Committee on Public Accounts.
[English]
While NHPs are often perceived as lower risk, they are not without risk, especially if products contain contaminants or are used improperly. When Canadians reach for a product,it is essential that they have confidence in its safety. They also need to be able to trust that what's on the label accurately represents what's inside the bottle, and that the health claims the product makes are truthful.
Health Canada recently conducted a pilot to proactively search the web and identify potential instances of non-compliant advertising. The equivalent of 3,800 advertising incidents were identified, and our assessment confirmed that 2,070 made cancer claims not permitted by Health Canada.
Furthermore, when we looked at the NHP marketplace between 2021 and 2023, there were 100 voluntary recalls of licensed NHPs for safety issues.
[Translation]
Additionally, Health Canada launched a pilot inspection program between March 2021 and March 2022 during which 36 sites of manufacturers and importers were inspected for good manufacturing practices. The pilot revealed issues ranging in severity at all sites, reinforcing the need for a permanent inspection program.
[English]
These gaps are why we are making changes to improve the safety of NHPs. Last year, Health Canada introduced new labelling regulations to help ensure that consumers have the information they need when choosing products.
This year, new legislation was passed to allow Health Canada to act on serious safety issues like ordering recalls or requiring warnings on labels if a company doesn't take action voluntarily.
[Translation]
More recently, Health Canada completed open and transparent consultations, garnering close to 5,000 responses, on a proposal that would see industry pay fees so that the department can, among other things, inspect manufacturing sites to improve product quality and safety.
[English]
The regulatory activities currently conducted by Health Canada in overseeing NHPs are currently paid for fully by taxpayers. In comparison, regulatory services for all other health products are funded through a mix of service fees and public funding.
If Health Canada does not charge fees for its services, the department is unable to strengthen its oversight of NHPs. While NHPs undoubtedly offer public health benefits, they also benefit private enterprises that make up the multi-billion dollar industry for these products. Ensuring sustainable funding of the oversight of NHPs while preserving accessibility and quality requires balancing taxpayers' contributions and industry's contributions more equitably.
We understand that many small businesses worry about the additional cost new fees would bring, and about their ability to continue marketing their products to Canadians. This is why we are proposing significant mitigation measures, such as meaningful fee reductions and waivers for small businesses.
As we complete the review of the thousands of comments received on our recently concluded consultation, we are considering how best to adjust our proposed approach to address the many concerns raised prior to further engagement with stakeholders.
[Translation]
In closing, Mr. Chair, we have a commitment to Canadians to ensure that the natural health products they rely on every day to maintain and improve their health are safe, and we have a plan to do just that.
We will now be pleased to answer any questions you may have.
:
Thank you very much, Mr. Chair, and thank you to the witnesses for being here.
I'll ask Dr. Sharma first.
Dr. Sharma, we've known each other for some time. I thank you for being here. I appreciate that.
You've made some comments in the media about misinformation and disinformation related to what was going on here. It pains me a bit. I think there's a bit of a truism here: If you tax the farmer who grows the food and you tax the trucker who ships the food, then the person who buys the food is going to have to pay more for it.
If you could, briefly tell me the difference here in the scheme. If you're taxing people who make these products and people who distribute these products, then how is the consumer not going to have to pay more?
Chair, to first clarify the comment I made in the interview, when we were talking about misinformation and disinformation, it was specifically in the context of some of the initiatives that were insinuating that Health Canada was specifically anti-NHP. We've heard at times that we were going to ban parsley or go into people's gardens and pull out cilantro. It really was in the context of some rhetoric that was out there that the misinformation and disinformation comment was made. It was really to illustrate that we're happy to have the conversation about any regulation we put forward, including the cost recovery regulations, but it's constructive if it's based in fact.
We have a program where the costs of the entire regulatory framework are currently borne by taxpayers, so 100% of those taxes, those costs, are borne by the taxpayer. There are gaps in the system now. We know that, through pilot programs we have on inspections, on good manufacturing practices, on surveys we've done, on claims and on advertising, we have a compliance gap there. Necessary improvements need to be made in order to regulate these products effectively to ensure they're safe, effective and of high quality, and Canadians can go into a safe marketplace. That's the principle.
Then, the proposal is—
:
Thank you all for being here.
I don't know about the rest of the MPs, but certainly my email inbox was inundated with complaints about this law. I received all kinds of postcards, and I have to say I'm a little perplexed as to why. I understand to a certain extent why, but certainly for parts of it it's hard to see why you wouldn't be advocating for it. My understanding is that previously Vanessa's Law, which requires hospitals and producers to report on the adverse effects of drugs, didn't apply to natural health products, but this is changing that.
I wanted to ask you a bit about the adverse effects of some medications, and I looked it up. With some of them, there can be interactions. For example, St. John's wort can interact with SSRIs —which are treatments for depression—and cause serotonin syndrome, which can be deadly. With regard to hepatotoxicity, there's a whole bunch of drugs implicated in that, particularly drugs in a class of pyrrolizidine alkaloids and ayurvedic medications that have it, such as comfrey and echinacea. Gingko biloba has antiplatelet, antithrombotic properties, so it interacts with Coumadin, NSAIDs and Aspirin.
I have another one here that I wrote down, from the Canadian Medical Association Journal this summer, August 2023. It had a case report of somebody presenting with lead toxicity. They eventually found out that the lead was coming from ayurvedic medicine the person was taking in order to try to get pregnant. They stopped it and she got better, but Public Health Ontario looked into ayurvedic medications and found one in which 13% of the content was lead.
First, do you agree with some of these? I don't believe my saying it is going to get it entered into the record. Secondly, have people been complaining? Have producers of naturopathic medications actually been complaining about having to report serious adverse effects, and have doctors been complaining? I find it hard to believe that people would actually complain about having to report such things. Am I wrong? Are they not complaining?
:
The short answer is they're not complaining, because it's not in effect yet, that specific provision under Vanessa's Law.
Under the Vanessa's Law provisions, some have come into effect already. For example, there's the ability to compel a recall of a product. I think people were surprised to know that before June 2023, we could recall a head of lettuce but we didn't have the authority to compel a recall of a natural health product. So that's in effect.
The mandatory or the compulsory reporting of serious adverse events by health care institutions is a provision, but it needs regulations in order to come into effect, so it actually isn't in effect yet. We will be bringing forward regulations and will go through the full consultation process before we do that.
People haven't been complaining about that part of it.
With respect to the adverse events, I think you did a really good job of going through some of the challenges. What we've said is that “low risk” is not “no risk”, and there are products that present a risk by themselves. Comfrey is an example of that. It was used as a tea, and it has very severe hepatotoxicity, liver toxicity, associated with it. There have been deaths associated with comfrey. It still can be used as a topical, on the skin, but even then it shouldn't be used on broken skin, because it can be absorbed and cause liver toxicity as well. It can be quite dangerous.
There are other products that can be quite dangerous, either because they're contaminated or because they're being used in combination with other products. Again, it's rare to have very serious events, but in general if a product has an effect on the body, then it can have a negative effect or an adverse effect as well, and the question is, what's the likelihood of that and what can you do to mitigate that? It's really about having information for consumers so that they can use those products safely and we can monitor those products. Then, if safety issues come up, we can do that.
There have been products.... There's a product called aristolochia that has been used for over 2,000 years, but recently—it started in the nineties but really it was in the 2000s—we found out that it can cause renal failure and cancers in the urinary system as well.
The products are not “no risk”.
:
One of the other parts of the law, in my understanding, is the requirement for honesty in advertising and not being able to make unsubstantiated claims.
I talked to a colleague of mine who was practising medicine, and he asked how big of a problem it is. I wondered, because I'm getting all these emails and postcards about this, whether it's really that big a problem. We're getting this big political hit because of this.
He said that he had a lot of patients who weren't taking their statins, which have been proven by a whole bunch of studies and medical analyses to reduce mortality—all-cause mortality but particularly cardiovascular-related mortality. I think the number he needed to treat was 35. A lot of his patients were not taking their statins because they were taking a natural health product that claimed to reduce cholesterol but was totally unproven.
My assertion about how many people are being hurt.... If you have presumably 35 people who are not taking statins because of that one person, there's going to be an adverse effect.
We'll try to define what's at stake. My question is for all three of you, and whoever feels most comfortable can answer it.
From the outset, I must say that your regulatory intention is laudable. I think even the industry agrees on this one. We're talking about natural health products. We have people's health at heart.
The measure you propose stems from an audit by the Office of the Auditor General. However, as things stand, if we don't modulate the regulatory intent by establishing more appropriate guidelines in terms of implementation and how to achieve the objectives of this reform, if I may call it that, it could ultimately produce effects contrary to those sought. The industry, among others, has pointed this out. We're told that the financial burden will be far too great. I'll be discussing this with you later, if I get the chance. This burden will be detrimental to research, innovation and competitiveness, and will result in major job losses. We certainly don't want to destroy an industry.
If we were to go ahead, we could find ourselves in conditions of unequal competition for regulated products. We could then see products making their way into Canadian homes that have not been approved or scrutinized at all. We can't afford to do that. People would use the Web to bring in these products. That's what I mean by effects contrary to the original objective.
To remedy this, have you done any impact studies, particularly with regard to pricing to recover some of the costs associated with regulation?
What do you have to say about these issues?
:
Thank you, Mr. Chair. Thank you to the witnesses for being here.
There's some controversy, but I think there are some facts and points on which there is broad common agreement among everybody in Canada. I think everybody wants natural health products to be safe and properly labelled, and for the claims made to be backed up by evidence and science. We know that something like three out of four Canadians rely on natural health products in some way as an integral part of their daily or weekly health regimen.
I think the other thing that is often overlooked is that this is an industry that is well regulated now. Some of the comments made seem to suggest sometimes that we don't have a lot of regulation. Industry and product users are asserting to me and other members of this committee, and probably to you, that they believe that the current regulations are quite effective—or perhaps they're not enforced enough—and that the proposed regulations are, if I may paraphrase, perhaps a solution in search of a problem, or may even constitute a cure worse than the disease.
I want to test that thesis with you. I've done some research. I went back, and 25 years ago this committee studied natural health products and issued 53 recommendations to Health Canada. You're familiar with those.
What is more interesting is that I found a document on Health Canada's website from 2003, entitled “Natural Health Products Directorate (NHPD) Progress on the 53 Recommendations of the Standing Committee on Health”. This is from 20 years ago. I wanted to put a few things to you to test that thesis about where we are.
Health Canada said this about recommendation 18:
18. Inspection activities be performed consistently and on a regular basis by inspectors knowledgeable about the products.
a. The NHPD is developing an inspection strategy for [natural health products]. The goal of the strategy is to ensure an appropriate level of oversight for these products, and consistency in its application.
Are you telling me that did not happen?
:
Certainly. Vanessa's Law really was quite a shift in terms of the authorities we have to regulate products. One of the tools that comes with Vanessa's Law is the ability to compel a recall. Again, it's not that we would get to the point where we would force a company to do a recall, but having that ability in place makes it easier for companies to comply when we have to do a recall.
It would take months to do a recall. Sometimes we wouldn't have companies providing information. It would take a long time for that to happen. Now that we have those provisions, that process or that time has really shortened. We have the ability to require tests and studies. If a safety issue comes up, we have the ability to go to the company and, again, make that request.
Again, a lot of these things are regulatory backstops. If they know that we have the authority to compel something to happen, then they're more likely to comply with those requests. It really has made the regulation of the products more efficient. When we're responding to safety issues that are urgent, we have those tools at our disposal. It also gives us the ability, if needed, to levy fines and penalties up to $5 million. We have provisions in Vanessa's Law about the sharing of confidential business information for public health benefits, and we've done that as well.
There's a whole series of tools that have made that—
As for labelling, the Regulatory Impact Analysis says, and I'm quoting Health Canada here, that “a preliminary scan did not identify important environmental impacts and concluded that a detailed strategic environmental assessment is not required” and that “the additional environmental impact of this initiative over and above the normal labelling process is expected to be minimal.”
However, the industry has been testing labelling with the new requirements in mind. To comply, not only the labels, but also the containers will have to be bigger. You've been told that modifications are needed. In a regulatory impact assessment, you stated that “no evidence was presented to support the claims made” by industry regarding additional costs and environmental impact. However, you didn't have an environmental impact assessment either, because you hadn't deemed it necessary to do one.
Are you open to the idea of having a more updated labelling model, worthy of 2023? Already, the labelling is outdated. You're going to ask that we operate with paper, labels, boxes and so on. This model will be applied for the next 10 years, so why aren't you using QR codes? Otherwise, in three years' time, this will be obsolete and, on top of that, you'll have hurt the industry.
How do you see it? Are you open to changes in this regard?
:
With respect to using a QR code on the label, there were a number of things that we looked at.
One was that, with a QR code.... It's not at the point of sale, so you're not able to do a comparison between products that have a similar label.
Also with respect to QR codes, the challenges are that not everyone has a cellphone, so they may not necessarily be able to use them. They may not want to use their data. If it goes to a website that has a lot of information, it might be long and they won't read it. It's very difficult to enforce the information on a website, because you can change it very quickly.
The other thing is this: If you take that key information off the label and just have the QR code, the only thing left on the label is the marketing.
It's a possibility, but there are a lot of reasons that, at the point of care, you don't have that information.
Mr. Chair, there was a question on the environmental impact of the labelling, if I may answer.
Let's go back to 2003, if I can take you back 20 years. I'm going to read again from Health Canada's document. It says:
b. The [natural health product directorate] recognizes that product labels should assist consumers in making informed choices with respect to NHPs.
c. Labels should assist in selecting products that meet individual needs and expectations, as well as the merits and limitations of products.
d. Labels should allow consumers and others to fully understand how products are to be used and stored to ensure their maximum benefit, and to be aware of any adverse reactions or other risks associated with the use of the product.
33. [Natural health product] labelling provide[s] consumers with all relevant information needed to make informed choices.
For the recommendation that product labelling “be standardized to provide clear and consistent product information”, you reported the status as follows:
NHP labelling requirements apply to all NHPs, therefore clear and consistent product information will be available to consumers.
Now, there's a whole list of things that the NHP regulations in 2003 required: “the dosage form”; “the net amount of...weight, measure or number”; “a list by proper name...of each medicinal ingredient per dosage unit, and...the authorized potency”; “a qualitative list of all non-medicinal ingredients”; “the recommended use or purpose; the recommended route of administration; the recommended dose and...duration of use; the risk information...including any cautions, warnings, contra-indications or known adverse reactions associated...; the recommended storage...; the lot number; the expiry date [and] a description of the source material of each medicinal ingredient that the product contains...when the ingredient is a plant or plant material....”
My question is this: If that is what you were telling Parliament in 2003—that that's what was going to be captured by labelling—what is the case to be made 20 years later to say that we need to change the labelling so that consumers are aware of things? I know you weren't the author at the time, but either it was not true then, or it's not required now. Help me understand that.
:
Thank you, Mr. Chair, and thank you to our guests for being here today.
This is my first meeting with witnesses after coming back on this committee, so I apologize because I wasn't part of the study or previous studies.
I want to go to Mr. Davies' comment regarding the natural health product directorate.
Pardon me, but I believe, Dr. Lourenco, that you were part of Health Canada 22 years ago. You've been with Health Canada for 22 years.
Dr. Hollett, you probably have been there for 10 or 12 years. It's 20? Well, congratulations and thank you.
Dr. Sharma, you're just probably at 10 or 12 years, I think. You've been there for 20 as well. Okay, so collectively, you've all been here since around about the time that the testimony we just heard was ramping up.
There were 53 recommendations. Where are we with the 53 recommendations? Again, it's just in the last nine years that you've been ramping up on the recommendations. Is that correct?
:
Thank you, Mr. Chair, and welcome to our witnesses.
Thank you, Dr. Sharma. I know you had an international commitment and you changed that on short notice. This shows commitment to the topic at hand and respect for our committee, as well as care for Canadians and their safety. I thank you for that.
A lot of conversation is being had around cost recovery and portrayal of cost recovery as a tax, not only on small businesses but also, ultimately causing an increase in the price. Therefore, it's another level of tax on the consumer during this inflationary time.
I would like to submit that I see cost recovery as implementation of the regulation, empowering Health Canada to ensure that the products being consumed more and more by all Canadians are safe products. I see cost recovery as actually ensuring the safety of the products and Canadians. When cost recovery comes into effect in April 2025, the burden of that cost is with the taxpayers regardless. Health Canada has to go through all of these regulations to ensure that people are kept safe—whether it comes out of taxpayer money from another bucket or through implementing these fees. As you mentioned, not all of the fees are being taken into account.
I understand there were two pilot inspection programs that the department did. The results are very interesting.
I would like you, for the next three and a half minutes, to spend some time explaining those two pilot programs and how they support us in ensuring safety through what is called cost recovery, and ensuring that Health Canada is empowered to ensure the safety of the product and Canadians.
Thank you.
:
I will start with the advertising, then I'll turn it over to Ms. Hollett for the GMP inspection.
The first pilot we did was in 2021. We conducted that pilot project to proactively monitor advertising. What the pilot did, through an AI tool, was to look on the web for advertising of natural health products that involved the word “cancer”. There's a prohibition. For certain serious diseases, you can't advertise or label a natural health product to treat or cure that disease. Cancer is one of them. When we did that, we found 3,800 cancer claims. Out of those claims, 63% were not appropriate. They were for treating or curing. They were, for whatever reason, misrepresenting their product with respect to their claims about cancer. That was one. Again, it's a snapshot.
We also just completed another one for other diseases. However, we just finished it. We're looking through the data, as well. It's on depression, obesity and other issues.
There is an issue around companies representing that their natural health products do things that we know they aren't allowed to claim and that, certainly, they can't do.
:
As I mentioned earlier, inspections of NHPs and NHP entities have been growing at Health Canada for some time now.
When the OAG report was released, we welcomed the opportunity to run an official GMP inspection pilot. For members who may not be aware, that is Health Canada inspectors entering companies and assessing companies against good manufacturing practices or standards.
We welcomed that opportunity, because our program has been a very solid program in the reactive space for a very long time, and the ability to enter into the proactive space puts us in a better position to protect health and safety.
Also, we see the benefits of inspection as being across the board—Canadians, entities involved in the supply chain or involved in the industry, and Health Canada. In 2021 we launched the GMP inspection pilot. It was 36 companies, manufacturers and importers, and we did inspections, as I said, based on those good manufacturing practice requirements. We had a chance to consult with and work with industry and industry associations on the inspection pilot, and then we conducted those 36 inspections over the year. We saw what we would consider serious deficiencies in 42% of the inspections that we conducted.
There was great collaboration with the entities we inspected when we made those observations, in terms of their taking timely action to address them. I do want to make that point. However, what we came away from the pilot with was a confirmation of what we've seen over the last number of years: a non-compliance rate or a serious deficiency rate of around 40% to 42%. What cost recovery would allow us to do....When Dr. Sharma earlier in the meeting referred to there being gaps we needed to fill or improvements we needed to make, one of the initiatives that cost recovery would fund is a more robust permanent inspection program.
:
Good evening. It's nice to see you all.
Like Mr. Doherty, I'm new to this committee and new to this file, so I did not benefit from participating in the decades of experience that you bring to this.
I was doing some math on this, and I'll tell you, in my by-election campaign during this summer, this was a major issue, especially for the smaller side of the small and medium-sized businesses that you're describing. This would crush them. The anxiety they feel about these taxes that are coming their way as well as the heavy-handedness generally of health policy-makers over the last four to five years.... It has created massive anxieties. I think they would benefit from more empathy when considering how to engage them and to ensure the safety of Canadians in the products they consume.
Health freedom is important, but so, too, is safety.
I was just looking at this, and maybe you can help explain this to me. There are 200,000 products. At $542 tax for each product, that amounts to over $108 million of annual tax revenue for the cost recovery piece of a 53-part program from 20 years ago. An annualized $108 million seems like an excessive approach toward cost recovery, when I can think of the Asian infrastructure bank as one immediate means to accomplish cost recovery for these types of services, which I'm sure cost a lot less than $108 million a year.
Could you explain to me the math around how this is the cost recovery that the Treasury Board's strict guidelines produced, Dr. Lourenco?
:
I'll try to make a little summary.
When I ask you if you have any impact studies on pricing, you answer me by talking about Treasury Board guidelines. That's what we have.
When I ask you if you have any evidence as to the development of mitigation measures for regulatory impacts, you respond by talking about Treasury Board guidelines again.
I also wanted to know if you had any environmental impact studies with regard to labelling. According to Health Canada documents, the department doesn't have any and didn't believe it should. Health Canada points out, for example, that the industry has not proven that there would be impacts as alleged. So far, neither of you seem inclined to pursue this further.
Moreover, you want to develop your labelling requirements over six years, and you claim that the means of labelling you advocate won't be obsolete at the end of that period. You know, there's a way to use a QR code to display a lot of the information you want to see, while still having, on the box, important indications for people's health about the product. You can distinguish the interesting information that should be there when you look at a product's packaging. Just as there are bar code scanners, there could also be QR code scanners. In short, I think your reform is already outdated.
I also asked you if Health Canada was open to changes. Environmental impact is important. It's impossible not to understand that, if we have to display all the necessary information on a bottle or can, this will cause an increase in waste. This seems to me to be common sense. Since environmental impacts are important, is Health Canada open to proposals from people in the field to modulate these requirements?
I'd like to say one last thing. You mentioned inspections. You've started doing them, and you've identified problems. However, have you provided the industry with guidelines so that they can comply and respond well to inspections? What we want is for people who haven't been inspected for years to know your criteria so they can comply. We have to be proactive.
:
I don't understand. That means it's $2.4 billion to run a program. Wow, that's a lot of money. It's an exorbitant amount of money.
I guess the other questions I have are related to looking at the scale of these issues.
I hate to say this. Do you know what? I was a family doctor for a long time. We talked about this nebulous number of 700 people who may have been harmed. Some of them, in the words of the , might have been admitted to hospital.
I'll follow along with what Mr. Fergus was trying to get at. Prescription drugs admittedly help tons of people, reduce mortality rates and make people live longer. I have a reference for you, if you would like, unlike what you have not been able to provide me: In this country, 50,000 seniors alone were admitted to hospital last year because of prescription drugs, which you already regulate. In the natural health products sector, 700 might have had an adverse event, and some might have been admitted to hospital.
I would suggest to you that we're talking about unnatural regulation. You're trying to regulate a sector that harms almost no people. It makes no sense. This is nonsensical—perhaps $2.4 billion of a budget. I can't even understand it. Also, not only are we going to regulate the natural health products sector in Canada into extinction—we're going to tax it to death—but we're also going to allow Canadians to continue to get medications and natural health products online from unregulated facilities elsewhere. There are no words for this.
I can understand why my colleague brings a small smattering of concerned citizens. Do you know what? This is part of the job. People come up to each of us in public and say, “How can you fight this so I can continue to get the vitamins, probiotics or prebiotics I want to have?” The scale of the issue is minuscule. I can't even understand this, or the money you want to recover. We've already heard from my colleague that the “right to sell” fee—which is one of the fees among an innumerable number of others—is up to $30 million and perhaps $100 million, because it's not simply what is sold. It's actually the licensed product, as I understand.
The amount of money you're asking of consumers is exorbitant. I can only attempt to understand how this government has driven Canada into the proverbial poorhouse and why we need to recover, out of the pockets of Canadians, another multiple billion dollars to fund the foolish spending of this government. I guess that's the only thing. To understand that very clearly is simply to follow the money and to ask, as well, that you table the number of people who are potentially having serious adverse events, some of whom have been admitted to hospital based on some nebulous concept and numbers that no one has been able to find. Trust me: We have searched very hard.
The final thing I would say, through you, Mr. Chair.... There isn't going to be a question here, thank you very much. I realize I have a timer on. The issue here is related to the fact that we're regulating something once again and trying to tax consumers further into the poorhouse when they can't afford to feed their families, put a roof over their heads or heat their homes in the coming winter.
From the bottom of my heart, thank you very much, Mr. Chair.
:
Thank you, Chair, for the opportunity to respond to the non-question and the question.
Right now, it's a $44-million program. With the changes and the improvements, that will increase to a $100-million program, and we can go through all of those improvements. There are no billions; it's millions. We're not saying that it's an insignificant amount of money. It's a considerable amount of money, but it's the amount of money that we need to make the improvements for Canadians to go into a safe marketplace.
It's a bit like apples and oranges if you're comparing natural health products to pharmaceutical products, because it's all about risks and benefits. What are you treating? You will accept a risk associated with chemotherapy, for example, that you wouldn't necessarily with something that's to treat a headache, for example. It's all about risks and benefits, and what we really are striving for is having a regulatory system that has the appropriate level of touch based on the risk of these products.
What we've found is that there are some parts of the program that are functioning quite well: the premarket review and the standards that have been set. Again, I just want to clarify, because there's been some rhetoric around our all of a sudden changing the levels of evidence that we're looking for. We're not saying that. We're saying that there are some gaps. There are some gaps with respect to how these products are represented to Canadians. There are gaps and there are issues around the quality of these products. We've had 100 recalls over the last year and a half for fibreglass and bacterial contamination in these products. We have a concern around the advertising, the way that these products are represented and what they're claiming to do for people. We have concerns about the facilities.
There are gaps that we need to fill, and there are resources that we need for that. It is a $5-billion-a-year industry that doesn't pay any fees. These are not taxes; these are service fees, and for those service fees they also get accountability. They would get timelines and deadlines for the services that are provided to them, and it's not all of the cost. Australia cost recovers 100% of its costs for this product line. Ours is a portion of those costs.
:
Thank you, Mr. Chair. I appreciate that.
When you say $1.60 per Canadian, you're making it out as being for every Canadian, when not every Canadian uses the products.
Number two, the reality is that $1.60 doesn't include the tax that will be put on it by the inflationary costs that are being created by what you're putting onto the product, the $542 per product. On top of that, there are the costs that will be factored in when you start looking at the huge costs that you have on the premarket evaluation, which can range up to $50,000 plus.
When you say $1, you're basing it on a very small factor of the taxes being put on there. The costs that the producer is going to have to put on.... As my colleague indicated, when you grow the food and you tax the farmer and then you tax the transporter, those costs come down on the consumer and on the individual. Those costs are high.
You talked about inspecting facilities and you sort of indicated “inspection-like”. The question I have is this: How many have you done?
:
Thank you, Mr. Chair. I'm pleased to have another chance to ask a few questions.
I'm reflecting on the influence....
Speaking of feedback, I understand that the public accounts committee deliberated on these topics last year. I'm quoting some colleagues—Conservative friends—one of whom asked, “What is the level of the sense of urgency to actually get some real, strong deterrents and actual teeth”, in reference to the Attorney General report showing NHPs being contaminated.
Another one said, “Do you not find this disturbing, and are there any products out there right now that are supposed to be recalled and are not?”
I sense some perhaps mixed messaging from my Conservative colleagues about the need to address the safety of Canadians with measures like this. I for one am happy to see that Health Canada and the are stepping up to include natural health products where they pose risks, to make sure those gaps are closed.
Dr. Sharma, you've spoken a lot about costs. I think you've clarified a lot of our questions about costs and what they actually mean to consumers.
Can I come back to the $1.60 per Canadian again? Can you elaborate on that, so we understand what that means for Canadian consumers?
:
Currently what's happening is that all of the costs are borne by taxpayer dollars for the entire framework.
If we're looking at the incremental increases from the cost recovery revenues, if we spread those costs across all Canadians—not just Canadians using products—if 100% of those costs were passed along by the industry to Canadians, that would be the equivalent of $1.60 per Canadian, regardless of whether they use the product or not. Again, it's really up to the companies what they do with those increased costs.
The $58,000 in terms of the fees, that's a class 3 product of the highest complexity, which is very novel and would take additional time. That's the minority.
The majority of products are class 1. The fee for a new product and seeking to market it in Canada would be just over $1,000. With the fee remissions for a small company, that would be $562. The equivalent of that for a pharmaceutical, prescription medication would be over $500,000 as a fee to Health Canada.
You mentioned a $5‑billion industry. That implies $2.8 billion in tax revenues. We're talking about a $100‑million program. You have received no indication from Treasury Board as to how much sales tax this industry generates. Nor do you have any indication of the impact that cost recovery fees and mitigation measures will have on this figure. It has to be said that some companies may disappear. We don't know anything about that, yet.
This is a $100‑million program, which you present as one for which the taxpayer pays. However, given the sales tax and the revenue generated by the tax, don't you agree that there is negotiating room to, first, really measure the true impact of this measure on businesses, particularly small businesses, and to adjust what is planned?
All over this grid, I see all sorts of figures: 58,000, 40,000, 23,000. There's still room for development. You're not basing this on any hard data.
:
Thank you for the question.
[English]
As I mentioned, we are currently looking at the comments we received through our consultation, and we will adjust our proposal.
Based on the proposal we have consulted on, if we look at the majority of companies on the market, over 60% of the companies are small businesses. A large majority of them market only a small number of products, one to five products. Most of them maintain those products on the market, so they're not bringing in new products, for example.
If we're looking at the current fees being imposed on the majority of those companies, up to $2,000 a year is what a company, a small business, would pay in order to market their five products. That being said, we understand that could still be difficult for some businesses. We are looking at all the comments we have received and we'll take additional measures to mitigate impacts.
:
I want to explore the policy around this cost recovery, and I'll tell you what I'm thinking.
First of all, this idea that we're not getting money from this industry is wrong. NHPs pay sales tax. Pharmaceuticals do not. That's a policy choice. Every time a consumer goes to a store and buys a natural health product, they are sending money to the federal government, and probably the provincial government as well. They are being taxed.
Number two, it's been said repeatedly that these natural products are the only line of health products for which Health Canada does not currently charge fees. Aren't we comparing apples to oranges? Pharmaceuticals, particularly brand names, get 20 years' patent protection of monopolistic pricing power. Natural health products do not. Also, pharmaceutical products, for 80% of Canadians, are reimbursed through insurance plans. Natural health products are not. Taking one thing and saying, “We can have cost recovery for NHPs, just the same as we do for the other ones,” without taking into account the entire physical structure, strikes me as being not only unfair but financially wrong. I just want to state that.
I find myself unclear about the data. We say that the products are low-risk, but that low risk is not no risk. Well, there are no products that have no risk. A basketball, or a kleenex, or my coffee in front of me has a risk.
I'm trying to find out the actual data you have that suggests a change is required. You said 80% of the products in the sample were advertised with misleading product information and 56% were marketed with misleading label information. However, Health Canada's own compliance monitoring project from 2015 found the opposite. The label review found that 92% were compliant. How do you explain the discrepancy between those two reports?
:
I just want to be clear and give you a chance to clarify or withdraw that statement, because in fact it is misrepresentation of this.
Listen, I don't want anybody to pass away from taking natural health products. I had a natural health store back in the nineties as well. That dates me. I too was on the end of saying, “Well, this is the next thing that's going to get you muscles and what have you.” Did I know? No, I didn't.
I guess your point today is that because of a product being unregulated, we saw the death of an 18-month-old toddler. That was how your comments came across. I'm just asking you to withdraw that, because in fact it was the parents, in their wishes, who didn't believe in hospitals at the time. They thought they could deal with the sickness. I guess they didn't understand the depth and the seriousness of the illness, and they tried with home remedies to make their child.... They loved their child, by all accounts. I believe they were charged with undue care ultimately....
I think your comments were misleading. You may not have intended it. That child didn't die because they used a natural health product. He died because they didn't get the appropriate treatment in a timely fashion. Is that correct?
:
With great trepidation, I'm going to continue the conversation along that vein. I think Mr. Davies asked a very good question, and I think your answer was very illuminating. The reason I say “with great trepidation” is the proviso that no one wants to impute or cast aspersions upon any parent. I know Mr. Doherty would agree with this, as well. As you mentioned, the death of a child is a tragedy beyond measure.
I think the point you made in your final answer in responding to Mr. Davies is that what often happens is that if you believe a claim about a product but that claim is unverified or unsubstantiated, it can have tragic consequences. It's not like a belt and suspenders in that you take a natural health product and a product that has undergone scientific rigour and study to make a validated claim. People usually pick one or the other.
I can see the attraction and why people would want to take natural health products. People are very concerned about what goes into their bodies, and so on and so forth. That's a very current view in Canada, and it has existed for a very long period of time. I'm not going to call into question what people's intentions are.
However, it seems to me that the minimum we would want to do to ensure that Canadians are safe, especially when it seems to having the same type of adverse.... As you said in answer to my last question, if the number of people who have adverse reactions to prescription drugs is the same as for natural health products, then you would want to make sure the claims made about those natural health products, or the ingredients of those natural health products, are clearly defined, so that people can understand what they're taking and make sure they know what's going into their bodies. Is that a fair comment to make?